Creating Clarity and Points of View Around Programmatic

"Programmatic in the context of TV is separate from the digital sense -- except both involve two sides of the same coin: data and automation," said Jeremy Crandall of VM-1, Zenith's dedicated Verizon agency.  Crandall was one of several speakers at the Summit to point out the relationship between programmatic TV and what most people think of as programmatic ad buying and selling.

For DISH Media Sales, many real-time programmatic TV buys come in the form of OTT impressions, and it looks a lot like digital.  "There's a lot of behind-the-scenes work that goes into building a programmatic TV platform," said DISH Media Sales' Montgomery Gilchrist, Business Development Account Executive for DISH's OTT offering, Sling TV.  "It doesn't happen overnight, but once you have the right framework and partnerships in place, to the advertiser the buying experience is the same [as digital]."  For the user, it's still just the overall TV experience.  "People still respond to a full-screen Nissan ad on their TV," he added.

After clearing up that aspect of programmatic TV the summit was able to get down to the real business: the promise and peril of a programmatic world.  The biggest opportunity, Gilchrist noted, is that of live dynamic ad insertion, something only possible with TV delivered over the internet.

Crandall agreed. "If you accept that in 10 years everything will be streaming, and everything will be addressable, you still have a marketplace that is $70 billion," he said.  "Making efficiencies and improvements, even on the margins, has a big impact."

"Where it gets really interesting in two to four years is when programmers say, 'Wait, I can get twice the CPM for these dynamically inserted ads,'" said Chris Flatley, DISH Media Sales Account Executive and Gilchrist's counterpart.

Gilchrist presented research that indicates ad spend on OTT products will hit $40 billion by 2020.  While the majority is currently for video-on-demand, live dynamic ad insertion will continue to take a healthy piece of that pie as more industry players invest in the live stream.

More live OTT inventory means more programmatic buys, which Gilchrist prides Sling on.  "Not to be too sales-y, but we were first to market," he noted, which meant they worked out some industry kinks, with Sling now offering their two minutes per hour of commercial time programmatically.  "Educating digital buyers on the ability to purchase live TV in the real-time bidding environment meant we saw a jump in daily transactions," he added.  "But it means the industry will grow overall, too, which is good for everyone."

With agencies having to do far more with far less budget, any reduction in friction is a good thing.  "We want to remove any barriers between buyer and seller," Gilchrist said.

Instead of siloing sales teams, Hulu Vice President of Advertising Sales Jim Keller said Hulu's approach was to mold its teams into jacks-of-all-trades, able to discuss the ins and outs of both regular deals and programmatic buying.

When Gabe Bevilacqua assumed the mantle of Senior Vice President, Product Management for Viacom's Advanced Advertising unit, he wanted to think about clients' holistic needs, rather than simply shoving out a flashy product.  "We don't come at it from the perspective of automation," he said.  "We come at it from, 'What is the right product for the marketplace?'"

Tens of billions of dollars is quite a lot of promise.  So what about the peril?

Jonathan Steuer, Chief Research Officer of Omnicom Media Group, sees perhaps an overemphasis on the creation of custom audiences, which are more expensive to buy.  "They're going to make the stuff I want more expensive than the stuff I don't want," he said.  Striking the right balance between generic but more affordable targeting and hyper-niche, digital-like targeting will be key.

"In a post-ANA, transparent world, our clients want to know exactly what's in the box," Steuer explained.  That means not wanting to see 35 percent of their spending going toward the media itself, with the rest going to all the activity around the buying of the media, i.e. the data sets to find the proper targeting, the myriad software stacks necessary, etc.

Of course, no industry conference is complete without a discussion of measurement and attribution -- the plumbing of these programmatic deals, as it were.  One concern with early stage adoption for TV buyers going programmatic is getting used to new forms of measurement -- similar to addressability adoption -- going from traditional linear attribution to impression-based models.

All the same, the attitude of both buyers and sellers is no longer that of kicking the programmatic can down the road.

"We started with spreadsheets," Bevilacqua said.  "We've come a long way.  We're not done, but we're getting there."

Click the social buttons above or below to share this story with your friends and colleagues.

The opinions and points of view expressed in this content are exclusively the views of the author and/or subject(s) and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated writers.